If oil was the buzzword of geopolitics in the previous century, the key to global influence in an era of climate change will lie elsewhere: minerals that power green technology.
In the run-up to the recent UN Climate Change Conference (COP26) in Glasgow, the International Energy Agency pointed out that demand will shift from coal and fossil fuels to minerals such as lithium, cobalt and copper in the coming decades, as countries transition to green energy.
Minerals such as lithium, cobalt and nickel are integral to the construction of batteries, while rare earth elements such as neodymium are crucial to wind turbines and electric vehicles. As electricity replaces fossil fuels, copper and aluminium will take centre stage as well.
As a result, if the world is to meet its goal of keeping the rise in global temperatures to “well below 2 degrees Celsius”, as pledged in the Paris Agreement, the International Energy Agency estimates that demand for these minerals will increase hugely: for lithium, by as much as 40 times, while the market for graphite, cobalt and nickel will shoot up by around 20-25 times.
China is already investing towards this paradigm shift, particularly in parts of the world where the US is now at a disadvantage. While former US president Donald Trump spent his term in office trying to revive the domestic coal industry, China was busy building ties with power brokers that controlled strategic mineral reserves around the world.
In 2015, Beijing rolled out the Made in China 2025 initiative, which includes a goal to dominate the global electric vehicle industry. Soon after, China began securing global supply lines for strategic minerals and cornered the mining industry across the resource-rich developing world.
Geopolitics has only served to help, especially in more dysfunctional, war-torn countries. Afghanistan, for instance, sits on a treasure trove of minerals worth US$1 trillion according to the US, including possibly one of the world’s largest lithium reserves. The Taliban are now in control of those reserves after the US and its allies exited ignominiously. China is already out there, exploring potential mines.
Early in November, representatives from five Chinese mining companies arrived in Afghanistan to conduct “on-site inspections of potential lithium projects”. At least 20 Chinese state-owned and private companies have also made similar inquiries, according to the Global Times.
China is now doing this largely unopposed by any competition. After the Taliban’s takeover of Kabul earlier this year, China was among the few countries to keep its embassy open in Afghanistan, even though Beijing has not yet officially recognised the Taliban regime. On their part, the Taliban has been eager to offer China whatever it can, realising that cooperation with Beijing is central to its quest for international recognition.
A cargo plane sits on the tarmac at Kabul International Airport on October 31, during a ceremony to mark the resumption of the export of pine nuts to China. The Taliban government hopes to rely on Beijing’s investment and support to rebuild the war-ravaged country. Photo: Xinhua
Similarly, in Africa – home to some of the world’s biggest mineral reserves – China has inserted itself into diplomatic vacuums and quietly built ties with regimes that have been at loggerheads with the West for years.
Take the Democratic Republic of the Congo, for example. A staggering 70 per cent of the world’s cobalt is mined in the country. As of last year, Chinese companies owned or financed 15 of the 19 cobalt mines there, according to a New York Times report.
Under the former Congolese president, Joseph Kabila, Beijing built a productive relationship which expanded that influence. Before he left office in 2019, Kabila’s tyrannical rule saw violent civil strife, disputed elections, and troubled relations with the West after he refused to step down following the expiry of his term in 2016.
In 2016, while Washington was distracted by political crisis, China Molybdenum acquired majority stakes in one of the country’s largest copper and cobalt mines, Tenke Fungurume, previously owned by the Arizona-based Freeport-McMoRan. Four years later, the same Chinese firm acquired yet another, even more impressive, cobalt reserve from the same American firm.
Excavators and drillers at work in an open pit at the Tenke Fungurume copper and cobalt mine in Congo in January 2013. Photo: Reuters
Such manoeuvres have now given China outsize influence in the refining and processing of the next generation of fuels. According to the International Energy Agency, China processes 50-70 per cent of the world’s lithium and cobalt, and as much as 90 per cent of its rare earth metals. China is also the largest processor of copper and nickel, with shares of 40 per cent and 35 per cent respectively.
China’s influence isn’t simply restricted to war-torn, fragile states that are at odds with the West; it has made significant investments in countries that are allies of the West, too. Over half of the world’s lithium, for instance, is produced in Australia. But 58 per cent of it is processed by China, according to IEA data.
China’s clout in these markets will prove to be a significant bargaining chip in the years ahead, especially as the West looks to move towards net-zero carbon emissions by 2050.
Under Trump and current President Joe Biden, Washington has led global discourse on diversifying global supply chains to reduce dependence on China. But, as far as green energy minerals are concerned, existing mines are far more concentrated in a few countries than is the case for oil and gas reserves – leaving the world with little option but to depend on China for at least the medium term.
In its foreign policy speeches, the Biden administration has emphasised its desire to build America’s capabilities and compete with China. The market for future energy sources is one area where American diplomacy will have to work overtime.
Mohamed Zeeshan is a foreign affairs columnist and the author of Flying Blind: India’s Quest for Global leadershipInternet Explorer Channel Network